December 20, 2013

Should Investigative Journalists Partner with Business?

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The setting was a recent conference on “Business in Society” at INSEAD, the business school based outside of Paris, where the authors of this article were presenting their ideas on media development. Unexpectedly, an executive from a major shipping company stood up and said: “We just learned that one of our sub-contractors in a certain country is in organized crime. We want more investigative reporting, so we can avoid such issues.”

Of course not all investigative reporting is about the Mafia; of course businesses have other ways to do background checks. But the larger issue is that honestly-run businesses, and in particular firms that have to answer to shareholders, greatly prefer to work in environments where rule of law applies. Smart executives in those firms understand perfectly that investigative reporting is one way to reinforce the rule of law. They also understand that gangster-funded “Berlusconization” of the media frequently makes their daily operations less secure and less profitable (for example, through extortion). Not a few firms have a growing interest in creating a different scenario.

That’s the argument the Kyiv Post is making to its advertisers in Ukraine, according to a recently-published case study from INSEAD and the World Association of Newspapers and News Publishers (WAN-IFRA). Is it a sufficient argument to keep an independent weekly newspaper’s finances in the black? Not so far as the Post can prove. But that’s not the point: There is no one argument, or single revenue source, that can keep an independent media alive in the 21st century. If we reframe the issue to ask, Do editorial independence and investigative capacity open new avenues of financing to media? – the answer is yes.

For decades, it has been assumed that investigative reporting is a cost, and not an asset that offers high return on investment, despite the success of media enterprises like 60 Minutes, The Economist Group and Le Canard enchaîné.  That assumption is based, in part, on the idea that investigative reporting is a form of public service; according to this concept, its final purpose is not to generate profit, but to change society for the better. Behind this concept, in turn, is the intuition that investigative reporting is a powerful weapon, and should not be misused for private purposes.

KyivPostThese arguments are valid, but they can lead to a restricted vision of how investigative reporting can function, as a social force and an enterprise. For example, it is rather amazing that in the 20-plus years since David L. Protess and his colleagues published The Journalism of Outrage, the classic work on how investigative reporting achieves results, there has been little research on how to make its insights operational. Chief among those insights is that investigative reporting is rarely effective when it is thrown over the wall, and often effective when it is researched and published in concert with a coalition of social interests.

Business is one of those interests, and investigative journalism can do more with it than treat it as an audience or a target. The link between enterprise reporting and the business community has very largely been ignored or misinterpreted in the debate over how to finance investigative reporting. In particular, it has been assumed that investigative reporting can only be a threat to business. Of course, corporate errors and crimes have been a major subject of investigative work. But the business world is not populated only by cretins and criminals.  It also includes a good number of smart people seeking legitimate competitive advantage, or simple justice. Actionable information supports those goals, as media consultant Jenny Luesby observed in Kenya, and investigative reporting can provide it.

It could in fact be argued that the business world has a more vested interest in credible information on societies, regions and the world, than even some traditional media donors. Many media donors, after all, are directly involved in advocacy, and often pay journalists in developing countries to spread their message. During co-author Evelyn Groenink’s time as director of the Forum for African Investigative Reporters (FAIR), she experienced certain traditional media donors trying to influence content of the group’s investigations in line with their priorities and values. In individual African countries, donor-funded NGO’s often gave (and give) assignments to journalists that are, in essence, simple PR-pieces for the work that the NGO in question was or is doing.

Though much advocacy, for example on climate change awareness and women’s rights, can’t be faulted in loftiness, advocacy is not investigative journalism and an investigation cannot be an advocacy piece. Simultaneously, like businesses, donors, government agencies, and the NGO world could be subjects of investigation. FAIR therefore always resisted “too close” relationships with any donors and even developed a protocol on project funding.

Interestingly, though FAIR always continued its dialogue with government-linked as well as private media donors, the group never engaged in discussions with the private sector. FAIR believed that being funded by businesses would “compromise” its independence more than being funded by traditional media donors. And indeed, anyone who has ever visited the Highway Africa Conference knows how much corporate advertising there is at that event. But FAIR never answered the question: what if some businesses would gladly agree to its funding protocol, i.e., donate and stay away from the content?

journalismofoutrageINSEAD and WAN-IFRA’s study of the Kviv Post suggests part of the answer. The Post’s current CEO, Mike Willard, is exploring a number of revenue sources, including sponsorship and programming of business conferences, bulk subscriptions to firms that want to support independent content, and advertising supplements for firms offering business services. All of these ideas depend for their success on the weekly’s brand as a quality source of reliable information, which businesses operating in Ukraine want to keep alive. All of them contribute directly to the Post’s top and bottom lines.

Indirect contributions come from the newspaper’s participation in the Organized Crime and Corruption Reporting Project, which help to subsidize the costs of producing exclusive reports. In sum, the Post is more successful than it would otherwise be, precisely because in Ukraine its name stands for reliable, exclusive, investigative news content.

Particularly in emerging markets, the key to media sustainability is to improve their quality, and financing that quality requires new solutions. It was believed until recently that some variant of the Western media business model could simply be imported into the developing world. But profit margins in the developing world cannot approach what media industries earned in the U.S. and Europe before the financial crisis – and media investors from developed economies are looking for high returns from emerging markets to compensate for the downturn on their home ground. Further, in the developing world advertising funds are used for “soft” censorship to an even greater degree than in mature markets. Yet even in the smallest markets, capable and skilled individuals have produced great journalism and successful businesses, such as Indonesia’s Jawa Pos newspaper or KBR68H “Asia Calling” radio.

wanifraTo widen this movement new motors are needed, and businesses can provide several of them. The first need is financial and management skills. Recent studies by WAN-IFRA confirmed that media development assistance is overweighted toward journalism training, and underweighted toward essential business skills. Parallel upgrades are needed in legal training (to help media withstand libel charges), lobbying (to change disastrous press laws like Hungary’s), newsroom management – especially project management, business and financial management, market research, and marketing.

A second investment is required in business development. The key is to diversify revenue streams, especially in markets where Western-style sources of revenue have not and may never fully develop. This is what the Kyiv Post is attempting to do, and it is also being done elsewhere. (For example, El Tiempo has developed winning multimedia strategies in Colombia.) New revenue sources could include content sales not only to media abroad, but also to NGOs or industry newsletters. Non-journalistic activities such as providing translation services or staging conferences – a key revenue source for emerging “stakeholder media” like Responsible Investor, which serve specific communities of interest – can also generate income. (The Kyiv Post is trying both these services, and both are generating some revenue.) There is a risk that media outlets will increasingly concentrate on activities that generate higher returns than watchdog reporting; but that is a smaller risk than going out of business.

Consulting and business intelligence may be seen by some as opportunities, though the use of a journalist’s research data by others would be seen as problematic by many of us. Additionally, “false flag” recruitment of investigative journalists by government or private entities/funders is a known risk in this field, and such liaisons can result in disastrous damage to the brand of independent media. Journalism schools and professional associations can play a major role here in defining ethical guidelines that recognize these new dilemmas.

It’s not enough, however, to say that the use of journalists’ research by others is a problem. It seems to us, rather, that investigative news organizations compile valuable and monetizable data that could be leveraged to the benefit not only of themselves, but also the broader community. This needn’t involve turning over the journalist’s data to an external source, but rather determining what kinds of products or outputs would provide real value that could either be sponsored by business/government/non-profits or sold directly to end-users. For instance, an investigative study on corruption in community engagement around extractive industries likely collects enough input and feedback from diverse players on the ground that it could be turned into a best-practice guide for community engagement or a local stakeholder map; something that would offer real value and could likely be monetized., which has created and monetized the leading database on global consumer boycotts, is a successful example of this approach, combining investigative insights, activism, and consultancy. (Other examples are cited in an INSEAD working paper, Disruptive News Technologies.)

A further necessity is to expand the public for independent news. One key will be to engage independent news outlets in media literacy programs, as a source of supplemental revenue for reporters, and as a way to recruit an informed and critical audience.

Financial investment is also essential. A growing financial flow from the BRIC countries (Brazil, Russia, India, China) into media elsewhere hasn’t visibly supported journalistic independence. Instead, investment in independent media has been undertaken mainly by foundations such as the Open Society Foundations or government-funded NGOs like Denmark’s International Media Support. More investment is needed from firms.

Again, the issue of independence is critical, and it can be managed. The Media Development Investment Fund has proven that investment in independent media can be profitable within a mutualized vehicle. Besides ownership stakes, corporate investments in media can also take the form of sponsorships. This was the classic form of media financing, and it has lately been revived by Vice News with success. For firms, the return on these investments can include brand value and access to change agents working toward similar goals.

Here the onus will be on news organisations to choose sponsors whose values they can accept. We are aware that conflicts of interest may arise: The East-West Journal, the voice of the U.S. macrobiotic movement, did excellent work on nutritional issues in the 1970s, but was less noted for investigating its sponsors. In some countries sponsorships will have to be public and arms-length to mitigate the inevitable accusation that foreigners are meddling in the affairs of sovereign peoples.

There are no silver bullets that will kill the problem of supporting investigative reporting. But there is clearly room for deeper involvement by business, especially in the developing world. There will always be risks of distraction, conflict of interest, or dependence in these relationships, and they will have to be monitored and managed. But those are not sufficient reasons to avoid building them. We can pay more attention to how the legitimate business community can support our work, and how we can enable that support.

Mark Lee Hunter is adjunct professor and senior research fellow at the INSEAD Social Innovation CentreKami Dar is co-founder and managing partner of Devex, a membership organization focused on international development. Evelyn Groenink is investigations editor for ZAM Chronicle, an Amsterdam-based magazine on Africa. Mirjana Milosevic is head of media development at the World Association of Newspapers and News Publishers (WAN-IFRA). Shorter versions of this article previously appeared in OpenDemocracy and (in German) Message – Internationale Zeitschrift für Journalismus.

2 thoughts on “Should Investigative Journalists Partner with Business?

  1. “There will always be risks of distraction, conflict of interest, or dependence in these relationships, and they will have to be monitored and managed.” Fine, but who, in the end, will be responsible for such monitoring and management; i.e., who will monitor the monitors?

  2. Dear Hrant, thanks for raising the question. Certainly there could be verification by independent groups; that’s how a number of corporate social responsibility initiatives function, and some of them are quite worthwhile. We can also expect any number of critics to keep a close eye on the situation.
    But monitoring the monitors is possibly a process step we can all do without. We were thinking that partnerships between business and investigative reporting will be monitored by a) the partners and b) the audience for the investigative work. It is really quite stunning how quickly audiences realize that a media they trusted is no longer telling what it knows. In Kenya, one botched big story set back The Nation Media Group for years (they learned their lesson and are now the benchmark in their market); in France, Le Monde’s compromised performance on the “Contaminated Blood” scandal had a similar effect (they came back too, but only after losing many of their best people to a start-up,
    As for the partners, conflict and its resolution are well-known features of business alliances. So is the fact that over time, people engaged in partnerships get better at running them. The bottom line is that we can get better at this.

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